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Under current tax law, farmers and fisherman are permitted to average their income over any three-year period if they have a given year when they receive a spike in income. However, timber owners are excluded from the definition of “farmers.”

Many non-industrial forest landowners make only a few substantial timber sales during their lifetimes. The occasions when timber sale income is received often place an unexpected and onerous tax burden on the landowners who may have modest income and may be retired or semi-retired.

Without income averaging, many family timber sellers, because of the large "spike" of income from a timber sale, are precluded from taking full advantage of otherwise permitted itemized deductions as well as certain credits that are phased out as income rises. Timber sale proceeds, when added to other income without income averaging, can in certain situations, also lead to triggering the onerous alternative minimum tax.

Family forest owners who make intermittent timber sales are as deserving of the option to income average as are farmers and fishermen. FLA, working with the Forest Landowners Tax Council, has had discussions with Congressional staff to alert them of this unfairness and to gain support in drafting legislation to amend the law to include small forest landowners.